steve46

Here is the open and the price action so far Once again, we have traded into the midpoint of the distribution Its really too bad that this "cannot be done" using statistics.... As with most things in life, its not cut & dried....one has to characterize how the market acts and then construct a viable trading plan around that knowledge.. For example looking at the market action for the last few sessions, one could make the case that on the open, there seems to be a tendency to sell off, and at specific times, a tendency to reverse....and take back that ground in the late morning and into the afternoon. In the late afternoon, short time frame players seem to be interested in taking profit and selling the market off slightly...can one construct a plan around that habitual behavior....oh yes...you certainly can.... Good luck everyone

Wednesday's DAX & ES Distributions

If one is so concerned with common sense, how about going and testing his assertions with regard to support and resistance pivots for yourself, rather than having pointless arguements about whether he is doing this "the right way"?

Drawing towards the close of the RTH session this is how price acted in the context of our previous day's distribution As with previous examples, price action remains the same, as price moves to test for sellers, and finding none moves back toward the midpoint (blue rectangle). Based on price action at various "test points" we see the market dominated by short time frame players, with long time frame participants standing aside to wait for Euro and domestic news, scheduled for latter in the week. This in our opinion continues to confirm that the distribution is working even during abreviated holiday sessions...

they'll be no change in the distributions for tomorrow.. For the overnight session, we expect rotational trade as Asia and Europe wait for the results of the Euro Policy Meeting (Thurs)...on the domestic side, we know that longer time frame participants will hesitate to take significant positions prior to the employment numbers on Friday. Many of my old colleagues simply take tomorrow off (especially those who use Market Profile)...and wait for the data to normalize....absent significant news or a surprising econ report, we would expect the short time frame participant to control the action until Wednesday... Good luck in the markets

"With few exceptions, those who are most interested in RT trades are those who want to be told what to do. They belong in trading rooms (though the trades there are likely not RT either). Those who want to learn to trade should understand the principles involved, then trade "RT" themselves through replay. Otherwise, they're just following somebody else's lead, and it's going to take them far longer to learn how to trade than somebody who takes control of the reins themselves." I copied and posted this because A)I agree with (most of) it....and B) it should be read by as many members as possible... Where I disagree is as follows; There is a hierachy of things that a "student trader" has to learn...from system development, to learning order types, to risk management, etc....one of the most important things a student trader must learn is how to be self possessed...meaning how to control their emotional status while they are "in" a trade.....this is critical because (as many of you well know) if you get out too soon, you miss the opportunity to make money....more importantly, you have cut short a profit opportunity and if you continue to make that mistake, the cost of your losing trades will overtake your reduced profits, and you will be out of business...I hope everyone reads and understand this important point as well.... I would argue that a skilled teacher should KNOW THIS and be able to provide the student with techniques that work to help the student get past this point..... by the way, none of that solves the problem of folks wanting to be told when to buy and sell...its a real significant roadblock to really learning how to operate in the markets.

and to close out this process...this for bluehorseshoe I can create a distribution for any liquid market...it just takes time to gather the data and do the analysis..its a matter of skill mostly and willingness to do the work. Interrestingly now I am getting inquiries from folks who want to "assist"....right.... So does it work for other markets? The attached chart shows the NQ. Direct your attention to the 10 min chart on the far left....notice how cleanly it respects the levels....it works just fine...

As usual I am beat...and need to get some sleep...from midnight on, we had nice entries available if you were willing to stay up and watch the charts. The distribution did its job and the logic shows me who is in control I invite folks to go back to the beginning of the thread and read the very intelligent (lol) comments published by folks here at TL.....gives you quite an insight into the psychopathology of our fellow humans. (I particularly enjoy the ones about what statistics "cannot" do....)

Very gratifying to see the distribution work so well. As seen in the 10 min chart we began with price opening near the midpoint, moving down to find sellers....what is encouraging about this move is the retest of the midpoint (blue rectangle)....the obvious setup is the test and failure (short entry) back at the border of the midpoint rectangle... (For those who may be new to the thread, the general logic is that (in our experience) price will tend to move from the the outside toward the midpoint, or from the midpoint to the outer extremes....and of course less frequently, from one extreme to the other. Along the way we have pivots (lines) and arrows provding guidance as to where to look for long and short entries.) As price continues to move south we see that a short entry would have produced a nice profit right away...as price moves south, the trader using the distribution can see that his next opportunity exists at or near the lower extreme of the distribution...and in this example we see price move to that extreme, fail to take it out, and reverse at the low of 1396.75 (our worksheet for this session calls for a long if price cannot close below 1395.25) The second long opportunity occurs when price retests the 1401 area...again using our worksheet, we see that closes above 1400.50 signal us to look for long entries...and as with all entries, our primary target is favorable excursion back into the midpoint (blue rectangle) and ultimately to the other side of the distribution....

A simple example and then I have to go back to work Here you see the market has opened and tests below one of my distribution lines...finding no sellers, price comes back up through that price point....looking at today's distribution (on my worksheet) I see that once price closes above this price, I can look for longs....now I leave it up to the reader whether to simply take the long at this point. or to wait for their own setup to occur....trader's choice... I hope this helps

I took the time to evaluate the data over a significant sample size and determined that 3 days was insufficient to produce a valid distribution for my purposes...

Yes, Cliff Sherry is good author, however if a person doesn't have at least a little bit of basic background, they will find that they don't really know how to use the information.. Just one man's opinion, but I think eventually you have to learn the basics A couple of recommendations Statistics for Dummies (Text) or Khan Academy (Internet) Good luck folks

In order to USE statistics one has to have knowledge of how statistics work.....and to do that takes at least a couple of years of study....my impression is that the general population here (read "Predictor's" comments about statistics)....has very little background and worse yet the "knowledge" they THINK they have is full of half truths and distortions.... If what you want is good information you will need to invest in yourself and get a solid background...go to your local College or University and take the 100 & 200 level courses of "Probability & Statistics"....if you pass those you will have a basis for applying what you learned to trading...if you have a background in general math, you might just go buy the course texts and go through at your own speed. Good luck to you

Getting started The simplest common sense way to get started is as follows 1. Start with a longer time frame bar or candle...depending on your style of trading, this is going to give you a look into the actions of longer time frame players, and it shows you the broad outlines of price movement....I use 30 minute candles What you want to do is to make useful observations about how price acts during the session 2. You want to move to a slightly shorter time frame in order to get a look at the granularity of the market...meaning you want to look at the actions of buyers and sellers at specific price points AND at specific times....I use 10 minute candles 3. For the shorter time frame traders, depending on your style of trading and your system, you may want to use still shorter bars or candles so that you can see where YOUR setups occur within the session..from my point of view determining if there is any cyclical component to your setups is very important..I use 3 minute (sometimes 1 minute) candles Underlying all of this, you should have a general reference system that helps you to determine where the market is headed...I use "time based pivots"....these pivots are simply a record of the yearly, quarterly, monthly, weekly and daily open, high and low.... Working from this starting point, you look at the market and make observations about the way that the market is moving towards or away from these time oriented price points...

I refer everyone to post 90...sure there is plenty I COULD do, including mow your lawn and wash your windows....lol I will do what I can As for execution...skilled folks don't get into that UNTIL they finish doing a "characterization" of the market (I started a thread on that subject). I suggest readers take a moment to look at that thread, then begin by reviewing previous price action for their target market....its relatively easy to do and the return is can be significant. If you do it correctly you won't need my advice as to how to execute...

NQ 5 & 10 day distribution for Sunday's Globex market It will be interesting to see how the distribution handes the holiday schedule

Alright well, we'll go one day at a time here Here is my "working" distribution for Sunday's Globex Open...this is the distribution that I would use for the next RTH session as well.. Notice that for the ES chart (on the right side) near the top we have an "up" and "down" arrow right next to each other....for me this means that depending how price acts at this price point, we will assume that either long time frame participants (up arrow) or short time frame participants (down arrow) are in control of the market... For those unfamiliar with the logic (taken from Market Profile Theory) when longer time frame participants come into the market, they are more likely to buy or sell at the extremes....In contrast, the so-called "short time frame" participants are more likely to buy support and sell resistance...thus creating range bound behavior (or engaging in profit taking" at or near the top of a range).

Do I ever sleep? Here is a post from Negotiators thread; http://www.traderslaboratory.com/forums/e-mini-futures-trading-laboratory/9773-day-trading-e-mini-futures-693.html Reference post 5539 I actually make a living trading....I work the overnight market and try to trade at least some of the RTH session...the result is that I am regularly sleep deprived...and THAT is why I do not offer to provide detailed citations for previous posts or as wrbtrader puts it... "spoonfeed" those who think the information is incomplete...I simply do not have the energy to do it... Your question about sleeping leads me to ask myself if this is a good idea...I will think about it and decide whether to continue... Thanks for you comments..

Interestingly most of the folks who contact me and say they have benefitted do not post... They lurk and read the posts and occaisionally send me PMs to ask questions... Based on that experience I have an idea of who it is that I want to help....and what I want to publish.... It may not be what you (traderunner) want to see...and if that is the case I invite you and anyone else who thinks as you do...to point & click somewhere else... Good luck to you

Sir (or Madam) I appreciate your pointing it out...I'll try not to let it happen again.

You are one of the few who seems to have paid attention to the details...you have summarized my comments accurately. I am very appreciative...I expect at some point to find a way to approximate my distributions so that the work doesn't take so long to do. When I have that in hand I will offer it to you.. Thanks very much.

and here's something that might be of interest to you People talk about trading price action, but then do not really seem to know what that means Price does in fact "tell you" what it is likely to do if you know where to look and how to intepret the behavior you see.. In the attached chart look over to the left, you can see my green arrow next to the wide range "up"candle"....nothing mysterious about it....significant buying came in there...now look to the right and you can see that as we retest that area, there is still what I call a "residual" reaction back up as buyers come in to defend those prices....in fact it happens several times You have to become a good observer....and in time, a skilled interpreter of price action. Some pretty good opportunities there if you put in the time...

Hi Sorry to have missed your other comments...I was up working the evening market and had to get some sleep.....as we discussed that first pullback is usually a good bet...understand that you need to monitor your market....and ask yourself "has that strategy been working in this market"....one of the things you will eventually get is that it is equally important to know when to stand aside, as it is to know when to get in....

I see what you are doing, and I thought I would mention a couple of things First, "trend" depends on both time & price....I use three time frames 10min, 3 min and 1 min Second "trend" is simply when candles or bars move vertically....when you have trend it means markets are out of balance and one side (buyers or sellers) are at least for the moment, in control....in contrast when you see candles or bars moving horizontally, what you see is balance (at least for the moment) between buyers and sellers To determine trend, decide what time frame you want to trade on, then ask yourself what do I see....vertical movement or horizontal movement....if you can't tell, move to the next time frame up or down...if you move up (to the longer time frame) you see direction...if you move down, you see granularity (it gets easier to see horizontal movement)... Your choice of time frame is important...because it determines your entry, stoploss and profit target...the longer your time frame, the "further out" you have to go on each of those elements. From my point of view the best way to go is to look at the big picture...what was price doing prior to your decision....then look at what it is doing now...if the market was trending, and now is just moving in a range...what I would do (if I thought price was going to resume trending) would be to try to get on board toward the low of that range...do you see what I am saying...? If you think the previous trend is over, you want to wait for a new trend to show itself...then begin the evaluation process all over again... Remember that an intraday basis, the market cycles between trend and range bound, between balance and imbalance...what you want to do is to find a way to "get into" or use that rhythm.... Keep it simple. Hope that helps.

LOL, here is what was happening while I was posting the previous note Pretty cool... Oh well, I am done..